Union budget-2008 and Indian pharma sector : Part 3

In short, the Indian pharma sector gains lot of advantages from the Union Budget of 2008 as I explained earlier through my blogs. Increase in Healthcare allocation increased the accessibility of quality healthcare to the common people of the country.

Total exemption of certain life saving drugs and bulk drugs used in manufacturing of such drugs from excise duty and reduction of customs duty on such products made these drugs available to the poor portion of the total population of India. These are the two implications which will influence the patients directly, so possessing the cardinal roles.

But the gains procured by the pharmaceutical industry are not of trifle value, as indirectly the ultimate advantage goes to the patients in the country. Most of the domestic pharmaceutical companies welcomed the budgets proposal to cut excise duty on drugs and said the move will help in making medicines more affordable to the common man. Hailing the budget as extremely positive, Ranbaxy CEO and Managing Director Malvinder Mohan Singh said apart from excise cuts, the Finance Ministers decision to include outsourced research and development operations under the exemption limits would boost drug discovery operations in the country.

According to him, the weighted tax deduction of 125 per cent to the outsourced R&D is certainly expected to boost the sector in a major way. The move would increase investments in R&D and would encourage a lot of contract researchers to set premises in India.

Chidambaram’s assurance to reduce excise duty on all goods produced in pharmaceutical sectors to eight per cent from sixteen per cent fulfilled industry’s long pending demand. Drug price regulatory body National Pharmaceutical Pricing Authority (NPPA) Chairman Ashok Kumar him self said the Finance Minister’s move to cut excise duty would ensure better availability of drugs to patients. Dr Swati Piramel- Director of Nicholas Piramel, a renowned domestic pharma company supported government’s move to reduce excise duty on pharmaceutical products as a positive move, especially from the point of view of small scale players who had to close down in the past. Allocation of funds for the eradiation of diseases like AIDS and polio will help the pharma companies like cipla which is mainly focusing on the manufacture of anti AIDS drugs and Panacea Biotech concentrating on oral polio vaccines.
In these ways, proposals of budget 2008 are beneficial to the patients and pharmaceutical companies of India. But can we say that the measures made are not having any pit-falls and devoid of any threats to the growing industry? For unveiling these factors we have to consider both sides of the coin and evaluate them properly. Discussion on this topic is relevant as the current Indian pharmaceutical scenario is concerned.
To be continued…..